DCIT, C.C.-XIX, Kolkata V. M/s. M.B.L. Infrastructure Ltd., Kolkata

ITA 1056/KOL/2009

• Counselvise Citation: 105623514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 23-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 17-06-2009
• Court: TRIBUNAL
• Department Lawyers: NIHAR DUTTA GUPTA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 133A; 153A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / ITA NOS . 1056 & 1057/KOL/2009 %& '(/ ASSESSMENT YEARS : 2004-05 & 2005-06 (*+ / APPELLANT ) D.C.I.T., CENTRAL CIRCLE-XIX, KOLKATA - % - - VERSUS - . (-.*+/ RESPONDENT ) M/S.MBL INFRASTRUCTURE LTD., KOLKATA (PAN:AACCM 0560 C) *+ / 0 '/ FOR THE APPELLANT: SHRI NIHAR DUTTA GUPTA -.*+ / 0 '/ FOR THE RESPONDENT: SHRI S.K.TULSIYAN 1%2 / !# /DATE OF HEARING : 27.10.2011. 3' / !# /DATE OF PRONOUNCEMENT : 7.12.2011. '4 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER DATED 13.03.2009 OF THE LD. CIT(A)-CENTRAL-II, KOLKATA PERTAINING TO A.YRS.2004-05 AND 2005-06 RESPECTIVELY. 2. THERE IS A DELAY OF 2 DAYS IN FILING OF T HE APPEAL BY THE REVENUE FOR WHICH REVENUE HAS FILED A CONDONATION PETITION EXPLAINING THE REASONS FOR SUCH DELAY. AFTER CONSIDERING THE SUBMISSIONS BY REVENUE THE DELAY IS CONDONED. 3. THE BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS U/S 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WERE CONDUCTED AT THE RESIDENCE AND BUSINESS PREMISES OF THE VARIOUS MEMB ERS OF MAHESWARI BROTHERS 2 GROUP ON 1910.2005 AND SUBSEQUENT DATES. SURVEY OPE RATIONS U/S 133A OF THE ACT WERE ALSO CONDUCTED IN THE PREMISES OF : I) MBL INFRASTRUCTURE LTD. (FORMERLY MAHESHWARI BRO THERS LTD. PRESENT ASSESSEE COMPANY) AT BURNPUR, WEST BENGAL AND B A VENUE, SAROJINI NAGAR, NEW DELHI. II) M/S. MAHESWARI STEEL PROCESSORS AT RIP INDUSTRI AL ESTATE, DURGAPUR, WEST BENGAL. 3.1. IN RESPONSE TO NOTICE ISSUED U/S 153A(A) OF TH E ACT, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 05.04.2007 AND 30.03.2007 F OR A.YS. 2004-05 AND 2005-06 RESPECTIVELY, DECLARING TOTAL INCOME AT NIL FOR BOT H THE YEARS. AS PER THE PROVISIONS OF SECTION 115JB, THE ASSESSEE DECLARED BOOK PROFITS O F RS.5,87,68,118/- AND RS.7,35,20,045/- FOR A.Y. 2004-05 AND 2005-06 RESPE CTIVELY. 3.2. IN COURSE OF THE SEARCH AND SEIZURE OPERATIONS , VARIOUS ASSETS, BOOKS OF ACCOUNTS, DOCUMENTS AND PAPERS WERE SEIZED/IMPOUNDE D FROM THE RESIDENTIAL AND BUSINESS PREMISES OF THE DIFFERENT MEMBERS OF THE M AHAESWARI GROUP. THESE INCLUDED SEIZED DOCUMENTS BEARING IDENTIFICATION MARKS MBL-1 , MBL-2, MBLC 1 TO 21 & CPU C/2 SEIZED FORM THE OFFICE OF THE ASSESSEE COMP ANY IN KOLKATA. THE SEIZED DOCUMENTS CONTAINED MIXED ENTRIES, BOTH OF DISCLOSE D AND UNDISCLOSED NATURE, OF VARIOUS MEMBERS OF THE MAHESWARI GROUP . 3.3. ALL THE UNDISCLOSED ENTRIES CONTAINED IN THE D OCUMENTS SEIZED FROM THE PREMISES OF THE ASSESSEE-COMPANY WERE ALSO OWNED UP BY THE APPLICANTS ABOVE NAMED AND THE RESULTANT UNDISCLOSED INCOME WAS OFFERED FO R TAXATION BEFORE THE HONBLE SETTLEMENT COMMISSION. THE SAID FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER DEALING WITH THE ASSESSMENT OF THE ASSESSEE COMPANY UNDER SECTION 153A OF THE ACT. THE ASSESSING OFFICER, HOWEVER, IGNORED TH E SUBMISSIONS OF THE ASSESSEE COMPANY AND COMPLETED THE ASSESSMENTS FOR THE IMPUG NED ASSESSMENT EARS AT ASTRONOMICAL FIGURES ON THE BASIS OF THE SAME SEIZE D DOCUMENTS VIZ. MBL-1 ALREADY COVERED IN THE APPLICATIONS FILED BEFORE THE HONBL E SETTLEMENT COMMISSION. THE 3 ADDITIONS MADE BY THE AO FOR THE IMPUGNED ASSESSMEN T YEARS AND THE SEIZED DOCUMENTS REFERENCE ON THE BASIS OF WHICH THE SAID ADDITIONS WERE MADE MAY BE SUMMARIZED AS UNDER :- PARTICULARS OF ADDITIONS MADE SEIZED DOCUMENTS NO. AMOUNT (RS.) A.Y.2004-05 AMOUNT (RS.) A.Y.2005-06 CASH PAYMENTS MBL-1, PGS.1-2 33,02,303 17,82,305 LOAN REFUNDS MADE IN CASH MBL-1, PG.4 11,10,000 1,00,000 INTEREST ON LOANS PAID IN CASH MBL-1, PG. 5 15,23,243 49,186 CASH PAYMENTS MBL-1, PGS.9-10 ---- 13 ,84,000 LOANS REPAID IN CASH MBL-1, PGS.17-23 3,49,47,000 4 ,59,97,000 CASH PAYMENTS MBL-1, PG.27 ----- 38,00,0 00 DIFFERENTIAL AMOUNT OF ALLEGED PURCHASES MBL-1, PG.32 31,55,250 ----------- PAYMENTS MADE TO PERSONNEL EMPLOYED IN ALGERIA MSP-9, PG.75 ----------- 38,60,281 TOTAL 4,40,37,796 5,69,72,772 3.4. ON APPEAL THE LD. CIT(A) ON THOROUGH EXAMINATI ON OF THE DOCUMENTS WHICH WERE PLACED BY ASSESSEE BEFORE ASSESSING OFFICER AS WELL AS THE FIRST APPELLATE AUTHORITY IN THE FORM OF PAPER BOOKS CONCLUDED THAT ALL THE IMPUGNED ENTRIES IN THE SEIZED DOCUMENTS MARKED MBL- 1 WERE: EITHER REFLECTED IN THE REGULAR BOOKS OF THE ASSE SSEE COMPANY OR OTHER CONSTITUENTS OF THE MAHESHWARI BROTHERS GROUP, OR DULY COVERED IN THE WORKINGS OF UNDISCLOSED INCOM E OFFERED IN THE HANDS OF THE FIVE APPLICANTS ABOVENAMED BEFORE THE HONBLE SETTL EMENT COMMISSION. THE LD. CIT(A) ACCORDINGLY ALLOWED THE APPEALS FILE D BY THE ASSESSEE COMPANY FOR BOTH THE ASSESSMENT YEARS VIZ. A.Y. 2004-05 AND A.Y . 2005-06. 3.5. THE RELEVANT DOCUMENTS ALONG WITH PAGE NUMBERS IN THE PAPER BOOK FILED BEFORE THE LD. CIT(A) ON WHICH THE LD. CIT(A) HAS R ELIED ARE AS UNDER :- (I) COPIES OF THE RELEVANT PAGES OF THE IMPUGNED DOCUME NTS SEIZED FROM THE PREMISES OF THE APPLICANT COMPANY VIZ. MBL-1 (II) AFFIDAVIT DATED 24.12.2007 FILED BY SRI RAM GOPAL M AHESHWARI & OTHERS BEFORE THE NOTARY PUBLIC, WEST BENGAL OWNING UP THE IMPUGNED ENTRIES IN 4 SEIZED DOCUMENTS MARKED MBL-1 (PGS.1, 2, 4, 5, 6, 8 -9, 17-23, 27, 30) PAGES 2-13 OF PAPER BOOK (III) THE APPLICATIONS FILED BEFORE THE HONBLE SETTLEMEN T COMMISSION BY FIVE APPLICANTS PAGES 36-57 OF PB (IV) THE WORKINGS OF UNDISCLOSED INCOME OFFERED B Y THE APPLICANTS BEFORE THE SETTLEMENT COMMISSION PAGES 58-79 OF PB (V) THE RULE 9 REPORTS PREPARED BY THE DEPARTMENT COVERING THE RELEVANT PAGES OF THE IMPUGNED SEIZED DOCUMENTS MBL-1 PAGES 80-93 OF PB (VI) THE REPLIES OF THE APPLICANTS TO THE RULE 9 RE PORTS - PAGES 94-98 OF PB (VII) THE ORDER OF THE SETTLEMENT COMMISSION U!S 24 5D(4) FINALIZING THE UNDISCLOSED INCOME AT THE FIGURE OFFERED BY THE APP LICANTS COVERING THE ENTRIES IN THE IMPUGNED SEIZED DOCUMENTS PAGES 99-111 OF PB (VIII) EXTRACTS OF REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY AND OTHER CONSTITUENTS OF THE MAHESHWARI GROUP CONTAINING SEV ERAL ENTRIES REFLECTED IN THE SEIZED DOCUMENTS PAGES 156-201 OF PB 3.6. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEF ORE US. 4. AT THE TIME OF HEARING BEFORE US THE LD. DR APPE ARING ON BEHALF OF THE REVENUE BY REFERRING TO THE VARIOUS OBSERVATIONS MADE BY AS SESSING OFFICER IN THE ASSESSMENT ORDER CONTENDED THAT THE ACTION OF ASSESSING OFFICE R IS JUSTIFIABLE. HOWEVER, HE NEITHER CONTRADICTED THE OBSERVATIONS MADE BY THE LD. CIT(A ) IN THE IMPUGNED ORDER NOR POINTED OUT THAT THE ADDITIONS MADE BY ASSESSING OF FICER ARE THE SUBJECT MATTER OF THE HONBLE SETTLEMENT COMMISSION. 5. ON THE OTHER HAND, THE LD. COUNSEL APPEARING ON BEHALF OF ASSESSEE BY FILING THE DETAILED WRITTEN SUBMISSIONS ESTABLISHED THE FACT T HAT ALL THE ENTRIES ARE REFLECTED IN THE REGULAR BOOKS OF THE ASSESSEE COMPANY OR DISCLOSED BY THE INDIVIDUAL DIRECTORS OF THE GROUP AS THEY ARE PERTAINING TO THE SAID GROUP. 5.1. FURTHER BY REFERRING TO THE WRITTEN SUBMISSIO NS THE LD. COUNSEL FOR ASSESSEE HAS SUBSTANTIATED THAT THE SEIZED DOCUMENTS BASED ON WH ICH THE LD. ASSESSING OFFICER HAS 5 MADE THE ADDITIONS HAS BEEN EITHER PROPERLY EXPLAIN ED IN THE REGULAR BOOKS OF ACCOUNTS OR DISCLOSED BY THE RESPECTIVE INDIVIDUALS BEFORE T HE HONBLE SETTLEMENT COMMISSION. THE RELEVANT SUBMISSIONS ARE AS UNDER :- SEIZED DOCUMENT NO . RELEVANT PARAS IN THE PAGE NOS. WRITTEN SUBMISSIONS MBL-1 PGS.1-2 2.1. TO 2.5. 4,5 & 6 MBL-1 PGS 4-5 3.1 TO 3.4. 7,8 & 9 MBL-1 PGS 9-10 4.1. TO 4.2. 9 & 10 MBL-1 PGS 17-23 5.1 TO 5.3. 11 TO 15 MBL-1 PG.27 6.1. TO 6.3. 15 TO 16 MBL-1 PG.32 7.1. TO 7.5. 16 TO 18 MSP-9 PG.75 8.1 TO 8.7. 18 TO 19 5.2. HE FURTHER SUBMITTED THAT ALL THE PAGE NOS. W HERE IT HAS BEEN INCLUDED IN THE REGULAR BOOKS OF ACCOUNTS. BASED ON THE ABOVE S UBMISSIONS SINCE THE AFORESAID PAYMENTS HAVE EITHER BEEN REFLECTED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY OR OTHER CONSTITUENTS OF THE MAHESWARI BROT HERS GROUP OR DISCLOSED IN APPLICATIONS FILED BEFORE THE HONBLE SETTLEMENT CO MMISSION. BEFORE THE AO THE ASSESSEE VIDE LETTER DATED 14.09.2007 SUBMITTED THA T THE IMPUGNED PAYMENTS WERE REFLECTED IN REGULAR BOOKS OF ACCOUNT. COPIES OF RE LEVANT LEDGER ACCOUNTS WERE ALSO FILED BEFORE THE AO. COPY OF THE SAID LETTER DATED 14.09.07 IS ENCLOSED AT PAGES 14-15 OF THE PAPER BOOK. THE AO HOWEVER, OVERLOOKED THE S UBMISSIONS OF THE ASSESSEE COMPANY. IN VIEW OF THE ABOVE THE LD. COUNSEL REQUE STED THAT THE ORDER OF THE AO MAKING THE AFORESAID ADDITION MAY BE QUASHED AND UP HELD THE ORDER OF THE LD. CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CARE FUL PERUSAL OF MATERIALS AVAILABLE ON RECORD INCLUDING THE SETTLEMENT COMMIS SION ORDER DATED 9.4.2008 IN RESPECT OF THE FOLLOWING GROUP OF MEMBERS WHICH ARE PLACED AT PAGE NOS. 99 TO 111 A) SHRI PAWAN KUMAR LAKHOTIA, B) SHRI MARUTI MAHESHWARI, C) SHRI ADITYA MAHESHWARI, D) SHRI ANJANEE KUMAR LAKHOTIA, E) SMT. REKHA DEVI LAKHOTIA, F) SHRI RAMGOPAL MAHESHWARI, 6 AND COPIES OF THE RELEVANT LEDGER ACCOUNTS WHICH WE RE PLACED AT PAGE NOS.157-201 OF THE PAPER BOOK WE ARE OF THE VIEW THAT THE ASSESSEE COMPANY ADDUCED CONCLUSIVE EVIDENCE TO PROVE THAT THE UNDISCLOSED ENTRIES CONT AINED IN IMPUGNED PAGES OF SEIZED DOCUMENT MARKED MBL- 1 BELONGED TO THE OTHER CONSTI TUENTS OF THE MAHESHWARI GROUP AND WERE OWNED UP BY THEM AND ACCEPTED AS SUC H BY THE HONBLE SETTLEMENT COMMISSION IN ORDERS PASSED U/S 245D(4) OF THE ACT. ALL THE IMPUGNED ENTRIES WERE ANALYSED BY THE ASSESSEE COMPANY IN DETAIL AND THE ENTRY TO ENTRY CORRELATION WITH THE CASH WORKINGS FILED BY THE APPLICANTS BEFORE THE HO NBLE SETTLEMENT COMMISSION WERE SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUTHORIT IES. THE ENTRIES OF DISCLOSED NATURE WERE ALSO CORRELATED WITH THE REGULAR BOOKS OF ACCO UNT OF THE CONCERNED PERSONS AND COPIES OF RELEVANT EXTRACTS OF THE REGULAR ACCOUNTS WERE FILED WITH THE A.O. AS SUCH, THE OWNERSHIP OF THE UNDISCLOSED ENTRIES BY THE CON CERNED APPLICANTS AND DUE REFLECTION OF DISCLOSED ENTRIES IN REGULAR BOOKS OF ACCOUNT WERE CATEGORICALLY ESTABLISHED. THUS, THE ASSESSEE COMPANY SUCCESSFULL Y REBUTTED THE PRESUMPTION OF OWNERSHIP OF SEIZED DOCUMENTS MARKED MBL-1 U/S 292C OF THE ACT. THE ONUS NOW SHIFTED ON THE DEPARTMENT TO DISPROVE THE CLAIM OF THE ASSESSEE COMPANY BY BRINGING ON RECORD COGENT EVIDENCE IN SUPPORT THEREOF. THE A O FAILED MISERABLY TO DISCHARGE SUCH ONUS. ON THE OTHER HAND, THE LD. CIT(A) AFTER TAKING INTO THE SUBMISSIONS OF ASSESSEE, ORDERS OF THE SETTLEMENT COMMISSION AND C OPIES OF THE LEDGER ACCOUNTS HAS RIGHTLY DELETED THE SAME. THEREFORE, WE UPHELD THE SAME AND DISMISS THE APPEAL OF THE REVENUE. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 7.12.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 7.12.2011. R.G.(.P.S.) 7 '4 / -5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1. M/S.MBL INFRASTRUCTURE LTD., 23A, N.S.ROAD, 3 RD FLOOR, KOLKATA-700001. 2 THE D.C.I.T.CENTRAL CIRCLE-XIX, KOLKATA. 3. THE CIT, 4. THE CIT(A)-CENTRAL-II, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA .5 -/ TRUE COPY, '4%1/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES